Tag: gdp

Asia Pacific markets started the trading week with gains despite China reporting that its economy grew at the lowest official pace in 28 years. Fourth quarter GDP growth was 6.4 percent, which was also in line with expectations. While Beijing’s official GDP figures are seen as one of the crucial indicators of China’s economic health, many outside experts have expressed skepticism about the veracity of the numbers. “Falling producer prices and new export orders point to a slowdown in China’s grow

Asia Pacific markets started the trading week with gains despite China reporting that its economy grew at the lowest official pace in 28 years.

The world’s second-largest economy grew 6.6 percent in 2018, which matched analysts’ expectations, and was lower than a revised 6.8 percent growth in 2017. Fourth quarter GDP growth was 6.4 percent, which was also in line with expectations.

“I think what we’re seeing actually in the fourth quarter is that while the economy is decelerating, we actually still have some of the supports,” Helen Zhu, head of China equities at Blackrock, told CNBC’s “Street Signs” on Monday. “For example, for most of the quarter, from the export front loading impact that we had probably before the Argentina G-20 (summit) when people’s expectations regarding trade became a little bit more optimistic.”

Chinese President Xi Jinping and U.S. President Donald Trump agreed to a 90-day pause in tariff escalation at the G-20 summit in Argentina late in 2018.

While Beijing’s official GDP figures are seen as one of the crucial indicators of China’s economic health, many outside experts have expressed skepticism about the veracity of the numbers.

Raymond Yeung, chief economist for Greater China at the Australia and New Zealand Banking Group, wrote in a note that China’s GDP numbers are “not an accurate gauge” of its economic growth. Still, he pointed out, the gap between the actual figures and the official targets usually shapes the government’s policy stance.

“Falling producer prices and new export orders point to a slowdown in China’s growth momentum,” Yeung added. “To celebrate the 70th anniversary of the founding of the People’s Republic of China in 2019, President Xi (Jinping) will still likely launch growth-supportive policies.”

The mainland Chinese markets, closely watched as a result of the ongoing U.S.-China trade fight, saw gains on the back of the data release. The Shanghai composite rose more than 0.5 percent to close at about 2,610.51 while the Shenzhen composite gained 0.607 percent to end its trading day at around 1,330.17. The Shenzhen component also advanced 0.592 percent to close at approximately 7,626.24.

The dollar held steady near a two-week high against a basket of currencies on Monday, as investor risk appetite held up despite the latest data showing China’s 2018 economic growth slowing to a near three-decade low. Along with a decline in Treasury yields earlier in the month which had accompanied the retreat in equities, the dollar index had slipped to a three-month low near 95.00 on Jan. 10. “Whether the current ‘risk on’ supporting the dollar can continue will likely depend on how U.S. corpo

The dollar held steady near a two-week high against a basket of currencies on Monday, as investor risk appetite held up despite the latest data showing China’s 2018 economic growth slowing to a near three-decade low.

The dollar index, which measures its strength against a group of six major currencies, was steady at 96.308 after climbing to 96.394 percent on Friday, its strongest since Jan. 4.

Hopes for a thaw in U.S.-China trade tensions, a more dovish-sounding Federal Reserve and optimism that Britain could avoid a “No-Deal” Brexit are some of the factors that have fanned the return in investor risk appetite, which went into a deep freeze in December as global equity markets tumbled.

Along with a decline in Treasury yields earlier in the month which had accompanied the retreat in equities, the dollar index had slipped to a three-month low near 95.00 on Jan. 10.

“The dollar index is clearly on a recovery track. The currency was stuck in a downtrend at the start of January but is now being bought back against its peers such as the yen, euro, pound and the Aussie,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“Whether the current ‘risk on’ supporting the dollar can continue will likely depend on how U.S. corporate earnings turn out. The United States and China falling out again over trade issues and volatile U.S. politics still remain the main potential risk factors.”

The U.S.-China trade friction has already put pressure on China’s economy, with the latest data showing the world’s second-biggest economy slowing further in the last quarter of 2018. Markets appeared to take the outcome, largely in line with expectations, in their stride.

The dollar was down 0.1 percent at 109.64 yen, taking a pause after climbing to a three-week high of 109.895 on Friday. The greenback had gained more than 1 percent against its Japanese peer last week.

The euro nudged up 0.15 percent to $1.1376 but remained in close reach of a two-week low of $1.1353 brushed on Friday.

The pound was 0.1 percent lower at $1.2860.

Sterling had climbed to a two-month peak of $1.3001 on Thursday on growing confidence that Britain can avoid leaving the European Union without a deal, but faced profit-taking on Friday.

“The pound is at current levels based on assumption that a no deal Brexit has been avoided. But even an exit with a deal will likely leave some damage on the economy, so it is difficult to see the pound make much further headway from here,” said Koji Fukaya, president at FPG Securities in Tokyo.

British Prime Minister Theresa May will on Monday put forward a motion on her proposed next steps. Over the following week, lawmakers will be able to propose alternatives. They will debate these plans on Jan. 29, and voting on them should indicate whether any could get majority support.

The Australian dollar was steady at $0.7166 after ending Friday on a loss of 0.3 percent.

The Aussie was largely unfazed by China’s growth numbers though analysts agree that any sharp drop in demand from its biggest trading partner would put a dent in local assets.

Australia’s close trading links with the world’s second-biggest economy means its currency is often regarded as a proxy to China-related trades.

The 10-year Treasury note yield rose to a three-week high of 2.799 percent on Friday, continuing its rise from a one-year low of 2.543 percent plumbed early in January.

The U.S. financial markets will be closed on Monday for Martin Luther King Jr. Day.

That could pull 2018 gross domestic product (GDP) growth to 6.6 percent, the lowest since 1990 and down from a revised 6.8 percent in 2017. “What China can really do this year is to prevent deflation, prevent a recession and a hard landing in the economy,” Chen said. On a quarterly basis, growth likely eased to 1.5 percent inOct-Dec from 1.6 percent in the preceding period. China will release its fourth-quarter and 2018 GDP data onMonday (0200 GMT), along with December factory output, retailsale

China is expected to report on Monday that economic growth cooled to its slowest in 28 years in 2018 amid weakening domestic demand and bruising U.S. tariffs, adding pressure on Beijing to roll out more support measures to avert a sharper slowdown.

Growing signs of weakness in China — which has generated nearly a third of global growth in the past decade — are stoking worries about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers.

Chinese policymakers have pledged more support for the economy this year to reduce the risk of massive job losses, but they have ruled out a “flood” of stimulus like that which Beijing has unleashed in the past, which quickly juiced growth rates but left a mountain of debt.

Analysts polled by Reuters expect the world’s second-largest economy to have grown 6.4 percent in the October-December quarter from a year earlier, slowing from the previous quarter’s 6.5 percent pace and matching levels last seen in early 2009 during the global financial crisis.

That could pull 2018 gross domestic product (GDP) growth to 6.6 percent, the lowest since 1990 and down from a revised 6.8 percent in 2017.

With stimulus measures expected to take some time to kick in, most analysts believe conditions in China are likely to get worse before they get better, and see a further slowdown to 6.3 percent this year. Some analysts believe real growth levels are already much weaker than official data suggest.

Even if China and the United States agree on a trade deal in current talks, which is a tall order, analysts said it would be no panacea for the sputtering Chinese economy unless Beijing can galvanize weak investment and consumer demand.

Chen Xingdong, chief China economist at BNP Paribas, said investors should not expect the latest round of stimulus to produce similar results as during the 2008-09 global crisis, when Beijing’s huge spending package quickly boosted growth.

“What China can really do this year is to prevent deflation, prevent a recession and a hard landing in the economy,” Chen said.

On a quarterly basis, growth likely eased to 1.5 percent inOct-Dec from 1.6 percent in the preceding period.

China will release its fourth-quarter and 2018 GDP data onMonday (0200 GMT), along with December factory output, retailsales and fixed-asset investment.

Since China’s quarterly GDP readings tend to be unusually steady, most investors prefer to focus on recent trends.

Surprising contractions in December trade data and factory activity gauges in recent weeks have suggested the economy cooled more quickly than expected at the end of 2018, leaving it on shakier footing at the start of the new year.

Sources have told Reuters that Beijing was planning tolower its growth target to 6-6.5 percent this year from around 6.5 percent in 2018.

No end in sight to record-setting government shutdown 11:58 AM ET Mon, 14 Jan 2019 | 01:49Going forward, federal workers could miss more paychecks and people who receive government assistance for food and housing may lose it. The shutdown will continue to delay some economic reports and could even disrupt tax returns. Here are some of the key upcoming dates to watch if nine federal departments, or about a quarter of the government, remain closed:

Going forward, federal workers could miss more paychecks and people who receive government assistance for food and housing may lose it. The shutdown will continue to delay some economic reports and could even disrupt tax returns.

Here are some of the key upcoming dates to watch if nine federal departments, or about a quarter of the government, remain closed:

China’s economy is fine, U.S. President Donald Trump and Chinese President Xi Jinping won’t fight a trade war and the Federal Reserve is a friend. Let’s begin with a test about the state of China’s economy. For last year as a whole, China’s inflation was 2.1 percent — a number that would even pass the price stability test from the Bundesbank’s stern taskmasters. Perhaps a spot of a local difficulty, as the Brits would say, but nothing that China’s 46 percent gross savings rate can’t handle. Does

China’s economy is fine, U.S. President Donald Trump and Chinese President Xi Jinping won’t fight a trade war and the Federal Reserve is a friend.

That’s what I think of the three main issues worrying the financial markets.

Let’s begin with a test about the state of China’s economy.

Does China have an inflation problem? No, the reported headline price inflation in December was 1.9 percent. That’s what hits the Chinese real purchasing power and determines the scope of discretionary monetary policy. Again, that’s the headline rate because Beijing does not play around with an array of manipulative inflation “measures.” For last year as a whole, China’s inflation was 2.1 percent — a number that would even pass the price stability test from the Bundesbank’s stern taskmasters.

Is China having a problem of bad public finances? Perhaps a spot of a local difficulty, as the Brits would say, but nothing that China’s 46 percent gross savings rate can’t handle. Broadly defined public sector accounts are expected to show a budget deficit of about 3 percent of GDP for the last calendar year, and the gross public debt is currently estimated at 46.3 percent of GDP. The debt could be a significant underestimate, but only China knows the truth about that, partly as a result of its own methodology of defining and measuring national accounts.

Does China need to import foreign savings to finance its public debt and budget deficits? No, China is a net capital exporter to the tune of 1.2 percent of its GDP.

Construction and materials were leading the gains in early deals, with Lafargeholcim up by 2 percent. The stock was upgraded to buy from underperform by Bank of America. There was also some momentum in personal and household goods due to stock upgrades. The U.K. housebuilder Taylor Wimpey rose 3.4 percent and led the gains across Europe. Renault shares were under the flatline too after news that former Nissan Motor Chairman Carlos Ghosn was indicted on two new charges of financial misconduct.

The pan-European Stoxx 600 was 0.2 percent with almost every sector in positive territory. Construction and materials were leading the gains in early deals, with Lafargeholcim up by 2 percent. The stock was upgraded to buy from underperform by Bank of America.

There was also some momentum in personal and household goods due to stock upgrades. The U.K. housebuilder Taylor Wimpey rose 3.4 percent and led the gains across Europe.

The Swiss company Straumann was also among the top gainers, after its CEO said that it wants to increase sales five-fold within a decade, Reuters reported.

On the other hand, Orion dropped more than 6 percent after Jefferies cut its grade on the pharma company. The research firm argued that the current 4.5 percent dividend yield is not enough to support the share price, Reuters reported.

Furthermore, Flybe fell as much as 90 percent after a consortium of Virgin Atlantic Ltd, Stobart Group and Cyrus Capital Partners agreed to buy the low-cost airline.

Renault shares were under the flatline too after news that former Nissan Motor Chairman Carlos Ghosn was indicted on two new charges of financial misconduct.

China plans to set a lower economic growth target of 6 percent to 6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand. Data later this month is expected to show the Chinese economy grew around 6.6 percent in 2018 — the weakest since 1990. Analysts are forecasting a further loss of momentum this year before policy support steps begin to kick in. “Considering em

China plans to set a lower economic growth target of 6 percent to 6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand.

The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting’s outcome.

Data later this month is expected to show the Chinese economy grew around 6.6 percent in 2018 — the weakest since 1990. Analysts are forecasting a further loss of momentum this year before policy support steps begin to kick in.

“It’s very difficult for growth to exceed 6.5 percent (this year), and there could be trouble if growth dips below 6 percent,” said one source who requested anonymity due to the sensitivity of the matter.

As the world’s second-largest economy loses steam, China’s top leaders are closely watching employment levels as factories could be forced to shed workers amid a trade war with the United States, despite a more resilient services sector, policy insiders said.

Growth of about 6.2 percent is needed in the next two years to meet the ruling Communist Party’s longstanding goal of doubling gross domestic product and incomes in the decade to 2020, and to turn China into a “modestly prosperous” nation.

“Considering employment, income and stability, we need growth of at least 6 percent this year,” said one of the sources.

Adopting a range as a target would give policymakers room to maneuver amid uncertainties caused by a tit-for-tat tariff war with the United States, as the two sides strive for a possible deal to settle their differences before March.

The government plans to maintain a 3 percent consumer inflation target for 2019 despite a recent softening in price rises, leaving some space for the government to stimulate weaker consumption.

Data this week showed China’s consumer inflation eased to 1.9 percent in December from 2.2 percent in November, below the government’s full-year target.

The State Council Information Office did not immediately respond to a Reuters request for comment.

Recent signals about the world’s second-largest economy point to weaker growth, including tech giant Apple recently lowering revenue guidance for the first quarter as it blamed a variety of factors including Chinese demand. And, on Monday, Hong Kong-listed automaker Geely said it missed its sales target in 2018 and was forecasting flat sales in 2019.

“It’s intriguing that the domestic demand part is the weak part — the external demand is not that bad,” said Taimur Baig, chief economist at DBS Group Research.

Last year, China reported economic growth of 6.5 percent in the third quarter — marking its weakest pace since the global financial crisis. Still, the country’s official growth target for 2018 was around 6.5 percent.

While official data indicated China’s economy held up for much of last year, it now appears to be slowing as production metrics and export orders fall amid the country’s trade dispute with the U.S., its largest trading partner.

Beyond the tariffs battle, China’s economy has been facing its own domestic headwinds. Even before U.S. President Donald Trump kicked off the latest escalation in trade tensions, Beijing was already trying to manage a slowdown in its economy after decades of breakneck growth.

Despite negotiations between the two economic giants underway in Beijing, Baig said it was unlikely that the trade war would end in the next three to six months because the areas of disagreement extend far beyond imports and exports.

In fact, he said, “We will breathe a little sigh of relief if things don’t get worse.”

At the beginning of December, Trump and Chinese President Xi Jinping agreed to a 90-day ceasefire that delayed the planned U.S. increase of tariffs on $200 billion worth of Chinese goods that were initially due to take effect on Jan. 1, while the two sides tried to negotiate a deal.

A positive signal, according to Baig, would be an extension of the three-month truce into the summer, giving the global economy some respite for the first half of the year.

Singapore’s economy grew more slowly than forecast in the fourth quarter after the manufacturing sector shrank, adding to concerns that a trade dispute between the United States and China will drag on growth in 2019. Gross domestic product was forecast to have expanded 3.2 percent in the fourth quarter from the previous three months, according to six economists surveyed by Reuters. The economy grew a revised 3.5 percent in the previous quarter. From a year earlier, the economy grew 2.2 percent i

Singapore’s economy grew more slowly than forecast in the fourth quarter after the manufacturing sector shrank, adding to concerns that a trade dispute between the United States and China will drag on growth in 2019.

Rising trade protectionism and uncertainty over U.S.-China relations are key risks for the city-state in the coming months although the impact from trade frictions have so far had only a limited impact on its small and open economy.

The trade-reliant economy grew 1.6 percent in the October-December period from the previous three months on an annualized and seasonally adjusted basis, the Ministry of Trade and Industry said in a statement, slower than expectations.

On a quarter-on-quarter seasonally-adjusted annualized basis, the manufacturing sector shrank 8.7 per cent, reversing from 3.1 percent growth in the third quarter, data showed.

Gross domestic product was forecast to have expanded 3.2 percent in the fourth quarter from the previous three months, according to six economists surveyed by Reuters. The economy grew a revised 3.5 percent in the previous quarter.

From a year earlier, the economy grew 2.2 percent in the fourth quarter, compared with the median forecast of 2.3 percent in the Reuters survey and a revised 2.3 percent growth in the third quarter.

The economy expanded 3.3 percent for all of 2018, slowing from a three-year high of 3.6 percent the prior year. The government’s forecast for 2018 growth had been 3.0 to 3.5 percent.

Singapore is considered a bellwether for global growth because international trade — equating to about 200 percent of its GDP — dwarfs its domestic economy.

Some economists have said that while growth is expected to slow in 2019, it may still expand at a sufficiently robust pace to justify more tightening by the Monetary Authority of Singapore.

However, a significant deterioration in the growth outlook will increase the odds for the central bank to stay on hold in April when it makes its next decision.

The government has a wide range for 2019’s GDP growth forecast of 1.5 to 3.5 percent.

Gross domestic product increased at a 3.4 percent annualized rate, the Commerce Department said on Friday in its third reading of third-quarter GDP growth. That was slightly down from the 3.5 percent pace estimated in October and well above the economy’s growth potential, which economists estimate to be about 2 percent. Growth estimates for the fourth quarter are around a 2.9 percent pace. Inventory investment added 2.33 percentage points to GDP growth. That was more than the 2.27 percentage poi

US economy expanded at 3.4 percent in the third quarter 4 Hours Ago | 06:21

The U.S. economy slowed in the third quarter a bit more than previously estimated, but the pace was likely strong enough to keep growth on track to hit the Trump administration’s 3 percent target this year, even as momentum appears to have moderated further early in the fourth quarter.

Gross domestic product increased at a 3.4 percent annualized rate, the Commerce Department said on Friday in its third reading of third-quarter GDP growth. That was slightly down from the 3.5 percent pace estimated in October and well above the economy’s growth potential, which economists estimate to be about 2 percent.

The revisions to the third-quarter GDP reading reflected markdowns to consumer spending and exports. Inventory accumulation was, however, much bigger than previously estimated. There were downward revisions to business spending on equipment and nonresidential structures, as well as residential investment.

The economy grew at a 4.2 percent pace in the April-June quarter.

The Federal Reserve raised interest rates on Wednesday for the fourth time this year, but forecast fewer rate hikes next year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.

The U.S. central bank slightly lowered its growth projections for 2019.

Growth is being driven by the Trump administration’s $1.5 trillion tax cut package, which has given consumer spending a jolt. The fiscal stimulus is part of measures adopted by the White House to boost annual growth to 3 percent on a sustainable basis.

But the economy appears to be slowing in the fourth quarter amid a widening trade deficit, sluggish business spending on equipment and a weak housing market.

The slowdown in growth is expected to spill over into 2019 as the fiscal stimulus fades and a bitter trade war with China and strong dollar undercut manufacturing. Growth estimates for the fourth quarter are around a 2.9 percent pace.

An alternative measure of economic growth, gross domestic income (GDI), increased at a rate of 4.3 percent in the third quarter, instead of the 4.0 percent pace reported last month.

The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at an unrevised a 3.8 percent rate in the July-September period.

After-tax corporate profits were revised up to show them rising at a 3.5 percent rate in the third quarter instead of the previously estimated 3.3 percent rate. Corporate profits rose at a 2.1 percent pace in the April-June period.

Inventories increased at an $89.8 billion rate, instead of the $86.6 billion rate estimated in November. Inventory investment added 2.33 percentage points to GDP growth. That was more than the 2.27 percentage points reported last month and was the biggest contribution since the fourth quarter of 2011.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3.5 percent rate in the third quarter, slightly down from the 3.6 percent rate estimated in November.